In case of dissolution of a Partnership Firm, assets of the firm shall be applied in the following order: (A) Paying unsecured debts of the firm (B) Paying secured debts of the firm (C) Paying partner’s loan (D) Paying partners’ capital Choose the correct answer from the options given below:
When dissolving a partnership firm, prioritizing asset application is crucial for settling debts and obligations. The sequence is: (B) Prioritize secured debts, as they have claims on specific assets. (A) Subsequently, address unsecured debts. (C) After all external debts are settled, repay any partner loans. (D) Lastly, distribute remaining assets to partners based on their capital contributions.